BY MISHMA CHAKANYUKA
MEDTECH Holdings posted a profit after tax of US$1,4 million in the year ended December 31, 2018 from a loss of US$459 279 in 2017, but the company has warned of imminent stock outs emanating from failure to pay debts owed to foreign creditors.
In a statement accompanying full year results, the company said it foresees continued delays in remitting foreign currency payments and this would negatively affect the company’s ability to service existing foreign creditors amounting to ZAR27,7 million which may lead to cuts in supply.
Medtech said the operating environment remained challenging during the period under review.
“This period was characterised by numerous challenges which included shortages of fuel and foreign currency. In addition price stability was affected and annual inflation closed the year at 42% up from 2,9% in January 2018.”
Revenue was up 11% to US$12,3 million compared to US$11,1 million in 2017.
The FMCG segment’s sales increased by 26%, while margins improved due to changes in sales mix, better reordering and focus on fast moving high profit margins.
“The medical segment recorded a 160% decline in sales as stock levels remained low due to foreign suppliers maintaining their stance of cutting lines of credit as a result of inability by banks to remit foreign payment.”
The group’s manufacturing segment posted a 13% decline in revenue due to changes to consumer spending patterns where consumers have shifted from larger to smaller pack sizes and increased competition for smuggled goods.
The company expects a decline in volumes in 2019, but it said it would maintain its market share and keep costs under control.
The group’s top five shareholders include, WestMinister Holdings (Africa) Limited, Titanium Marketing and Distribution (Pvt) Limited, GPC Trust, Agricultural Insurance Co and Patel Jinesh.